While the likelihood of Apple releasing new iPhones this year is all but certain, a discussion between analysts and Apple's top brass has also dropped clues that the iPhone's pricing may not be static this year.

Toni Sacconaghi of Bernstein Research mentions in a research note that a discussion with Apple COO Tim Cook, CFO Petter Oppenheimer and worldwide marketing senior VP Phil Schiller point both to an upgrade to the touchscreen device as well as to the possibility of "different pricing/price points" this year, with Cook "examining iPhone's business model" for possible changes.

Cook and Schiller in particular have teased a "very exciting" 2009 for iPhones.

What these possible price changes would entail isn't divulged by the Apple executives, although Sacconaghi is quick to dampen rumors of an iPhone nano or a similar low-budget cellphone. Without naming any one of the executives as a source, he gathers from his investigations that the company isn't presently chasing such a concept.

Any future iPhone, he says, will probably have at least a web browser and access to the App Store, the latter of which has Cook, Oppenheimer and Schiller particularly "bullish" about the iPhone's success as it gives Apple an advantage over rival smartphone makers.

The firm's leaders are also adamant that iPhones won't come with hardware keyboards. A fixed set of keys reportedly makes it harder to implement different keyboards, such as for different languages, and would also make it harder for third-party developers hoping to use their own custom control schemes. Using the touchscreen as the primary input improves Apple's bottom line by letting it ship what's essentially the same phone across many different regions, the executives say.

No matter the changes to Apple's iPhone pricing structure, such a move wouldn't be uncharacteristic of the Cupertino, Calif. electronics giant. Each year of the iPhone's existence has had at least one major price shakeup: the iPhone's maximum price fell from $599 to $399 in 2007, while the iPhone 3G in 2008 not only reduced this top price to $299 but switched the behind-the-scenes profit model from revenue sharing with carriers to a heavy device subsidy.

But the Apple TV's position is considerably less optimistic, Sacconaghi warns. After his talk with the senior staffers, he understands that Apple views "lots of barriers" for the networkable media hub and doesn't see it as a current business cornerstone like it does iPhones, iPods and Macs.

Not to downplay the company's prospects, though, the Bernstein researcher says the management team is maintaining an "unwavering" level of belief in its guidance for the January-to-March quarter even as it has no intention of cutting prices; the upgraded plastic MacBook is selling well but is still being outsold by its more expensive aluminum cousins, according to the executives, who also see a lot of headroom in computer market share.

While Sacconaghi doesn't make many predictions, he repeats frequent expectations of an iPhone in summer and also believes Apple may update the iMac in March.

1) AppleTV is bleh. A PS3 serves a much better function than a AppleTV with the ability to play Blu-ray movies, stream music, play downloaded HDTV shows (both legal and torrented), as well as games. It's simply not that useful when any Blu-ray player + Netflix is cheaper in the long run!
2) New iPhones pretty much have to come out in June because people who signed their original 2-year iPhone contracts in 2007 will be up. I doubt they'd really want them to go elsewhere!
3) An iPhone will always include: 480x320 res screen and 3.5" touchscreen simply because of the App Store. Messing with either one will cause WAY too many problems when you've got thousands of applications and millions of iPhones/iPod Touches to support.
4) Because of point two, there will NEVER be an iPhone nano. It simply does not make sense, when the App Store is a cash cow in an of itself. Remember that Apple sells software mainly to sell hardware (similar to iTunes/iPod model). Doesn't make sense to cut off that revenue stream.

Anyway, a likely scenario is keeping the iPhone 3G as a "base" model and then updating with a more expensive model. This gives the appearance of the iPhone getting cheaper without hurting Apple's bottom line too much.

I would be really disappointed if Apple came out with multiple models (beyond the storage) for the iPhone. The first two made it really simple for customers to get and the price point of the 3G model has put it in so many hands. I work for AT&T and picking plans is really simple for people to understand. iPhone puts all this great stuff on their phone and they are more than likely to use it. It has helped spark the smart phone revolution more than anything and people love it. Don't mess with a good thing!

3) An iPhone will always include: 480x320 res screen and 3.5" touchscreen simply because of the App Store. Messing with either one will cause WAY too many problems when you've got thousands of applications and millions of iPhones/iPod Touches to support.

An interesting idea, but look at how they separated the iPod games store from the iPhone store. They can't stick with 480 x 320 forever, and surely they must have realised that beforehand?

How does the internal workings of the iPhone affect resolution? If ever there was an argument for resolution independence, the transition between different generations of devices is it...

How does the internal workings of the iPhone affect resolution? If ever there was an argument for resolution independence, the transition between different generations of devices is it...

I'm pretty sure that a drop in resolution or screen size is not in the cards. I don't see much justification for higher resolution at the existing screen size, but there is space to make the screen longer in the current form factor. Existing fixed resolution applications would run fine in a "compatibility box" within that screen, while those applications that have vertical scrolling (lists, documents, Web pages) would simply use the additional room and require no changes.

A 568 x 320 display would be 16:9. A 512 x 320 display would be 16:10. A 568 x 320 display would have a 4" diagonal and can be made to fit the existing form factor by modifying slightly the home button and moving the speaker close to the edge. It would fit an additional row of icons.

Possibly, a new design with a 568 x 320 display would be a bit longer, so it could also be made slightly narrower (yet hold a battery with the same volume). For the sake of simplicity, the actual resolution could end up being rounded to 560 x 320 and achieve essentially the same effect.

If this "widescreen" iPhone were sold at the high end, the current "standard" format would be the low end, especially if they take 3G away. You would get two phones, clearly separated, but both good and app-store compatible. Meanwhile, Apple will probably ax the classic iPod 5G, so overall product count would remain the same.

Mess with success and you wind up messing up the success. Page 1, Steve Jobs guide to running Apple.

The "At least a browser..." part scares me. AT LEAST. I'd hope since I'm forking out more than $80 a month for PHONE service it comes with AT LEAST a browser.

They mess with the device like this, come out with cheaper less capable units and it puts a hurt on the image.

I'd like to see a more sturdy unit like the original. Everyone I know who owns a 3G model (say maybe 2 doz) have broken it in some form. And this is why I don't have one anymore (sold the 1st gen to buy the 2nd, but fell in love with the reception from the good old Motorola I was using in between).

Toni Sacconaghi is always good for restating the obvious at best, or passing off the most hare-brained rumors at worst.

AppleTV is more of a "stake in the ground" than anything else at this point IMO. We're still some years off from where video delivery over the Internet will supplant physical media, and there are many pieces that still need to fall into place for that to happen: more widespread and faster broadband connections, more agreeable licensing terms from the big studios, more content available, higher quality (1080p), &c.

The place where iPhone can go "lower-end" is on the service plans. I don't see Apple trying to hit a $100 subsidized price point for the iPhone, and the vast majority of the expense for the consumer is the price of their ATT contract with unlimited data over two years. I guess ATT could offer a measured or limited data plan for less money per month, but of course people would then complain when they go over their plan's bandwidth limits and incur massive overage fees.

I think iPhone can go higher resolution without too much trouble. I haven't poked much into the iPhone SDK, but aren't iPhone's graphical elements resolution-independent like most of Mac OS X's?

The consistency of development for the iPhone platform so far is a huge advantage. Try developing for all the different versions of the Blackberry out there, and all the potential different variations of the Android (Does the device have a physical keyboard? Does it have a touch screen?). Apple would do well to protect that consistency at all costs and only build on top of that where it offers a clear path forward towards advancing the product and the platform.

I think iPhone can go higher resolution without too much trouble. I haven't poked much into the iPhone SDK, but aren't iPhone's graphical elements resolution-independent like most of Mac OS X's?

You can write resolution independent apps, but you can also write resolution dependent ones. Overall I'd say that raising resolution is not a huge problem. But a lower resolution iPhone would be a bad, bad idea, which is why I'd be surprised if they ever introduce an iPhone nano with a smaller screen.

a) people can finally stop talking about an iPhone "nano." Why on EARTH would apple ever create such a product? When have they ever catered to a stripped down, featureless market? They can only reiterate this fact so many times, yet the "analysts" even as recently as a few weeks ago continue to spew rumors of a "3G-less" version, or some other ridiculous idea.

b) apple will probably reduce prices for the iPhone this summer. If not an explicit price decrease (ie, 8GB model costs $99, for example), then more likely they'll drop the 16gb to $199 and introduce a new 32GB model at $299 (better yet, they'll upgrade the processor as well as some software upgrade for all users). THIS is how apple works. Look at every single ipod revision and many routine computer upgrades. Bring the "a" model down to "b" prices, and introduce a new A model.

When have they ever catered to a stripped down, featureless market? They can only reiterate this fact so many times, yet the "analysts" even as recently as a few weeks ago continue to spew rumors of a "3G-less" version, or some other ridiculous idea.

When? Well, with the iPod nano, for one. Apple can sell cheap things, when they make sense. The problem with the iPhone nano concept is that it would have broken the hugely successful App store model.

That said, I wouldn't call "3G-less" stripped down. I have the original Edge model and it's a bit slower, but good enough for what I need when away from WiFi. Edge also uses less power, so it even has a non-trivial advantage.

3G is probably the best place to cut costs for a lower end model. You sure as heck can't shrink the screen, lose the touch interface, or put in a slower processor.

In fact a 3G-less model would be just like your new A, old B gets cheaper routine, except slightly retroactively. The cheap model would basically be the original iPhone, except with 2.x firmware. Parts for that phone are much cheaper now than two years ago.

a) people can finally stop talking about an iPhone "nano." Why on EARTH would apple ever create such a product? When have they ever catered to a stripped down, featureless market? They can only reiterate this fact so many times, yet the "analysts" even as recently as a few weeks ago continue to spew rumors of a "3G-less" version, or some other ridiculous idea.

b) apple will probably reduce prices for the iPhone this summer. If not an explicit price decrease (ie, 8GB model costs $99, for example), then more likely they'll drop the 16gb to $199 and introduce a new 32GB model at $299 (better yet, they'll upgrade the processor as well as some software upgrade for all users). THIS is how apple works. Look at every single ipod revision and many routine computer upgrades. Bring the "a" model down to "b" prices, and introduce a new A model.

all of this, of course, IMHO

The iPods got simpler which each new product category. I can see an iPhone Nano being just a phone and PMP, but only after the current market for full featured iPhones is saturated.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

I'm pretty sure that a drop in resolution or screen size is not in the cards. I don't see much justification for higher resolution at the existing screen size, but there is space to make the screen longer in the current form factor. Existing fixed resolution applications would run fine in a "compatibility box" within that screen, while those applications that have vertical scrolling (lists, documents, Web pages) would simply use the additional room and require no changes.

A 568 x 320 display would be 16:9. A 512 x 320 display would be 16:10. A 568 x 320 display would have a 4" diagonal and can be made to fit the existing form factor by modifying slightly the home button and moving the speaker close to the edge. It would fit an additional row of icons.

Possibly, a new design with a 568 x 320 display would be a bit longer, so it could also be made slightly narrower (yet hold a battery with the same volume). For the sake of simplicity, the actual resolution could end up being rounded to 560 x 320 and achieve essentially the same effect.

If this "widescreen" iPhone were sold at the high end, the current "standard" format would be the low end, especially if they take 3G away. You would get two phones, clearly separated, but both good and app-store compatible. Meanwhile, Apple will probably ax the classic iPod 5G, so overall product count would remain the same.

I Agree. There is plenty room for more screen real estate in the current form factor, but will/can they take advantage of it is the question.

Quote:

Originally Posted by GTL215

b) apple will probably reduce prices for the iPhone this summer. If not an explicit price decrease (ie, 8GB model costs $99, for example), then more likely they'll drop the 16gb to $199 and introduce a new 32GB model at $299 (better yet, they'll upgrade the processor as well as some software upgrade for all users). THIS is how apple works. Look at every single ipod revision and many routine computer upgrades. Bring the "a" model down to "b" prices, and introduce a new A model.

all of this, of course, IMHO

I agree with this as well. Current 8gb model will be the $99 model. New, Upgraded version released with 16gb ($199) and a 32gb ($299).

The iPods got simpler which each new product category. I can see an iPhone Nano being just a phone and PMP, but only after the current market for full featured iPhones is saturated."]

Yea actualy that seems very likely. When the regular iPhone becomes a regular commodity like the ipod is it will expand its reach into the markets the regular iPhone doesnt cover. This doesnt in anyway mean that it will be a cheap product just a different ball park right

" Any future iPhone, he says, will probably have at least a web browser and access to the App Store, the latter of which has Cook, Oppenheimer and Schiller particularly "bullish" about the iPhone's success as it gives Apple an advantage over rival smartphone makers."
I could see them giving the option of not paying for 3G data, but allowing 3G data to exist for App store access as well as other limited services such as Location Services for which they could continue to sell Apps for. The Kindle has data access for the purpose of selling soft product. They'll follow that. If a person wishes to activate 3G full-time - they'll pay AT&T for the plan.

When? Well, with the iPod nano, for one. Apple can sell cheap things, when they make sense. The problem with the iPhone nano concept is that it would have broken the hugely successful App store model.

Yes, but the iPod nano is still what Apple said an iPod was at the beginning - a music player. Even the iPod shuffle is a music player.

So what did Apple say an iPhone was at its intro? A widescreen iPod with touch controls, a phone, and an Internet communicator. So you can expect all iPhones to be at least those three things. And I would say that a fourth thing, the AppStore, has been added.

I echo that the most likely way forward is that the iPhone 3G feature set (possibly in a new skin) moves down in price (subsidized) to possibly $99 (8GB) and $149 (16GB), and the new iPhone X is priced at $199 (16GB) and $299 (32GB). Both phones can be bought with either a $15 limited data plan or a $30 unlimited data plan.

1) AppleTV is bleh. A PS3 serves a much better function than a AppleTV with the ability to play Blu-ray movies, stream music, play downloaded HDTV shows (both legal and torrented), as well as games. It's simply not that useful when any Blu-ray player + Netflix is cheaper in the long run!

One can make the same argument against the iPhone, Mac, etc. Apple isn't about being cheapest in any area.

Quote:

2) New iPhones pretty much have to come out in June because people who signed their original 2-year iPhone contracts in 2007 will be up. I doubt they'd really want them to go elsewhere!

Updated models don't have to come out in June. Last spring Apple released the 16 GB version. I don't think Apple expects to only sell new iPhones to existing iPhone users.

Quote:

3) An iPhone will always include: 480x320 res screen and 3.5" touchscreen simply because of the App Store. Messing with either one will cause WAY too many problems when you've got thousands of applications and millions of iPhones/iPod Touches to support.

No, the iPhone uses resolution independence. Everything drawn on the screen can be drawn by the OS scaled up to look the same on a higher resolution screen. Minimal changes might be required of some titles to fit higher res screens properly. Scaling up the iPhone's resolution will be much easier than doing the same thing on the Mac, where apps draw more of the screen's elements manually rather than using Core Animation and other frameworks.

Additionally, there's no barrier to offering special apps that only work on specific new models, such as those that currently work on the iPhone but not the touch. Apple's iPod store has sold games that only worked on specific models, too.

Quote:

4) Because of point two, there will NEVER be an iPhone nano. It simply does not make sense, when the App Store is a cash cow in an of itself. Remember that Apple sells software mainly to sell hardware (similar to iTunes/iPod model). Doesn't make sense to cut off that revenue stream.

The article outlines where there will be no Nano model.

Quote:

Anyway, a likely scenario is keeping the iPhone 3G as a "base" model and then updating with a more expensive model. This gives the appearance of the iPhone getting cheaper without hurting Apple's bottom line too much.

I iPhone doesn't need to get cheaper, it needs to gain sophistication.

I think everyone agrees that at&t is Apple's weakest link and once they are free of that stone around their neck, the iPhone will really find it's true potential as a consumer electronics product.

Therefore the real growth will be with the iPod touch as it morphs into a larger tablet. Who needs carriers - especially AT&T. As long as Verizon and the others keep throwing $50 phones at their customers, switchers will eventually stall. Some people actually buy phones with their actual call connection as their number 1 priority .

Originally Posted by SpamSandwich
I think everyone agrees that at&t is Apple's weakest link and once they are free of that stone around their neck, the iPhone will really find it's true potential as a consumer electronics product.

Therefore the real growth will be with the iPod touch as it morphs into a larger tablet. Who needs carriers - especially AT&T. As long as Verizon and the others keep throwing $50 phones at their customers, switchers will eventually stall. Some people actually buy phones with their actual call connection as their number 1 priority .

If it weren't for Apple's partnership with AT&T, the iPhone would be in the same position as Apple TV: needing a broadband partnership and facing subsidized competitors.

AT&T represents the best GSM/UMTS network in the US, which allowed Apple a stepping stone into global markets. A CDMA2000 iPhone would have required dual development, fracturing Apple's engineering resources while only allowing it to sell its product to users who didn't need to switch. The iPhone's carrier-switch potential is what got it picked up, subsidized, and sold. Further, a CDMA iPhone wouldn't be much use outside the US. That's a lot of work for zero upside.

The fact that AT&T has weak coverage spots as it completes its national network (it and Cingular before it are both simply networks of GSM carriers that were patched together quite recently) is not reason enough to pursue a random strategy that offers speculative hardware to customers who already have subsidized alternatives. Apple did 100% the right thing in partnering with AT&T. It's a matter of knowing where the puck will be, not making "seems right" decisions based on how things have gone.

A big iPod touch would rapidly become less useful as it got larger. It's a great fantasy product, but certainly not going to happen any time soon,

But the Apple TV's position is considerably less optimistic, Sacconaghi warns. After his talk with the senior staffers, he understands that Apple views "lots of barriers" for the networkable media hub and doesn't see it as a current business cornerstone like it does iPhones, iPods and Macs

That's because they made the fatal mistake of morphing Apple TV into an iTunes Jukebox when it could have become so much more. They should just rename it as iTunes TV.

a) people can finally stop talking about an iPhone "nano." Why on EARTH would apple ever create such a product? When have they ever catered to a stripped down, featureless market? They can only reiterate this fact so many times, yet the "analysts" even as recently as a few weeks ago continue to spew rumors of a "3G-less" version, or some other ridiculous idea.

I recall people saying the iPod mini was the dumbest idea ever, but that was also about when the iPod hit mainstream and the mini became the best selling model.

It sounds like there probably won't be a new sub-3G Apple data phone though, if forum member reports of EDGE getting removed in 3G areas is correct.

I can't rule out a subcategory like mini or nano, maybe not inevitable, but I don't think of it as a never kind of thing. I think solipsism may well have a good lead on it, I see it coming out, but only when Apple sees fit. Remember, Apple didn't release a flash-based iPod until they could make it with sufficient capacity to not feel so constrained, 64MB or even 256MB was common but wasn't much to work with. Things would have to be a little different to make it smaller and still work with the app store and such, I expect maybe the same res, but smaller screen, and the virtual keyboard replaced with T9 type input.

Quote:

Originally Posted by iVlad

Apple has been very quiet in the past 6 months in terms of changes to iPhone. I think they're working on something important. That's how it was before 3G. All energy was given to the hardware testing.

This is not new. Apple PR is usually very quiet. It's not as if those people have anything to do with hardware testing anyway.

But the Apple TV's position is considerably less optimistic, Sacconaghi warns. After his talk with the senior staffers, he understands that Apple views "lots of barriers" for the networkable media hub and doesn't see it as a current business cornerstone like it does iPhones, iPods and Macs.

I see big potential for Apple in the home media server market. I know people say that giving DVR capabilities to the Apple TV will undercut the iTunes store, but the only reason there isn't an Apple TV on my because it can't do those things. I love my TiVo, and I think Apple is missing the boat on this one. Not to mention I would sign-up in a heartbeat for an iTunes subscription service to the likes of Netflix.

Just say no to MacMall. They don't honor their promotions and won't respond to customer inquiries. There are better retailers out there.

isnt the iPod touch basically a stripped down iPhone already? Everything so far points to the Touches selling quite well. What effect would an entry-level iPhone (however you define it - no 3g - smaller screen - cheaper data plan - whatever) have on iPod Touch sales? I would imagine they would cannibalize them to a large enough degree where apple would not venture down that road.

Things would have to be a little different to make it smaller and still work with the app store and such, I expect maybe the same res, but smaller screen, and the virtual keyboard replaced with T9 type input.

What effect would an entry-level iPhone (however you define it - no 3g - smaller screen - cheaper data plan - whatever) have on iPod Touch sales? I would imagine they would cannibalize them to a large enough degree where apple would not venture down that road.

IMHO, Only the availability of pre-paid phone plans would eat into iPod Touch share. People buy the Touch when they don't want to pay the monthly cost and own a phone with a cheap plan (or, rarely, own no cellphone at all). The Touch itself is not cheaper than the iPhone; it's not competing on purchase price. It's competing on TCO. That's not likely to change soon, but probably will eventually.

Using the iPhone/iPod Touch OS on a tablet is bad idea. A Mac tablet needs the full Mac OS X with touch to be worth it.

Interesting - i was recently thinking about that. Would the mobile OS X work on a larger tablet device? I was leaning towards yes, but it's hard to say. It will depend on innovation from 3rd party devs as well as apple opening up the SDK a bit. Nonetheless, I don't think apple will go down the tablet road until SSD prices come down enough to make them standard, as opposed to $600 optional upgrades.

That's because they made the fatal mistake of morphing Apple TV into an iTunes Jukebox when it could have become so much more. They should just rename it as iTunes TV.

I agree with you on this point. Every time I think about buying an Apple TV I am let down by the idea that it is 40GB (Even 160GB is not worth the extra $100) and that I cannot access my movie file on my Time Capsule directly without messing around with my MBP iTunes. Apple need to do two simple things for the Apple TV; 1) increase the capacity (I mean come on... iPods have a bigger HDD!!!) , and 2) make Apple TV a real standalone independent media center. Furthermore, the option to use a keyboard with it is also welcomed.

Interesting - i was recently thinking about that. Would the mobile OS X work on a larger tablet device? I was leaning towards yes, but it's hard to say. It will depend on innovation from 3rd party devs as well as apple opening up the SDK a bit. Nonetheless, I don't think apple will go down the tablet road until SSD prices come down enough to make them standard, as opposed to $600 optional upgrades.

The problem with using anything other that Mac OS on a tablet is that you will have to buy all your software again. Furthermore, you will need USB ports and Mini-Display port. Why build a new OS while you have one ready?! Snow Leopard is the perfect candidate for Mac tablet OS since it will have smaller footprint on your HDD and optimized for multi-core processor to reduce energy consumption. One issue would be how existing programs response to multi-touch.

The problem with using anything other that Mac OS on a tablet is that you will have to buy all your software again. Furthermore, you will need USB ports and Mini-Display port. Why build a new OS while you have one ready?! Snow Leopard is the perfect candidate for Mac tablet OS since it will have smaller footprint on your HDD and optimized for multi-core processor to reduce energy consumption.

i don't disagree at all..i was just entertaining the thought recently about the current iPhone OS being ported to a larger device (not building a new OS)

It is easier to create an iPod Nano and Shuffle because the original concept of the iPod is mainly as a music (or audio) player plus simple image viewer. Size does not matter as much, and the iPod Nanos and Shuffles do not exactly cannibalize the other models. It is possible for an existing iPod owner to buy an iPod Nano or Shuffle, as a more rugged music player during exercise, running and other physical activities -- you do not have to carry your entire music library.

While the iPhone/iPod Touch may never have a hardware keyboard, a screen keyboard is still needed and this requirement will limit the size of the screen itself before the space alloted for the alphanumeric characters become too compressed. Any smaller screen will require a stylus. Moreover, it will require a vision much better than 20/20 to use the iPhone/iPod Touch for internet browsing. Imagin the gaming experience also in a very small screen. These make the speculations of an iPhone Nano impractical or unattractive to potential users.

As a telephone device, AT&T may attract more subscribers if it will have multiple plans -- full phone function but variable plans for text messaging, email and data access (internet) access. Basically, it would be similar to an iPod Touch with basic phone capabilities. The question would be more whether AT&T will provide cheaper plans.

I for one have no need to use an iPhone for email, text messaging or internet, if I can access these via WiFi. If AT&T will not offer cheaper plans, I will just stick with my current phone and buy an iPod Touch when "white band" wireless technology becomes more widespread -- including internet telephony, GPS, etc., especially in urban areas.

The iPhone/iPod Touch models are portable miniaturized computers capable of internet, gaming, email, music, and other multimedia functions, plus in the case of the iPhone also serves as telephone.

The iPod Touch is not a full phone, right now but it can serve as an internet-based telephone via WiFi. The advent of HD TV has released what is referred to as the "white band" space that is envisioned to make wireless more widespread for portable devices.

It will take a few years, but once the "white band" wireless technology becomes more widespread, the iPod Touch can become a full-function internet telephone with greater range. Moreover, it will be independent of technological disparity among telephone companies, especially in the US.

Other possible evolution of the multifunction iPod Touch would be a larger screen model that may serve as a more practical reader without causing much eye strain -- akin to the Amazon Kindle. My own bias is that a dedicated reader like the Kindle is too limited in function and consumer base. A better evolution would be a larger screen iPod Touch with all the capabilities of a netbook. With a larger screen size of an iPod Touch, it may not only serve as a convenient reader, the same larger iPod Touch may be more practical as a portable gaming device.

Rather that omit functions for the iPhone/iPod Touch it is far better for Apple to add more useful functions that the consumer may want, to attract even existing owners to upgrade. As suggested by others, the existing basic 3G iPhone (8Gb) may become the "starter" iPhone for the masses. Apple has done this with the MacBook when it retained the Classic White model (at a cheaper price).